Leave Nexen Alone?

A lot of fuss is being made over CNOC’s attempt to acquire Nexen. On the surface, this looks like the same, same-old. After all, some truly historical Canadian companies have been absorbed by international concerns. The once mighty Gulf Canada was purchased by ConocoPhillips. Dome, another solid Alberta outfit ended up with Amoco, which was purchased by BP. I have no idea who purchased Norcen (they gave me a scholarship when I was an undergrad)… maybe Husky? But then, Husky is Canadian (majority owned by a Hong Kong resident).  What about Canadian Hunter? They were one of the most innovative Canadian oil and gas producers of the last 50 years! They were gobbled up by Devon. So… what is the difference?

Well, as a Canadian, I can go purchase shares of ANY of the companies that own the above assets. I can still participate in their economic success. I can go to shareholder meetings and hold them accountable! Try and do that with CNOC. You will be disappointed. Do not ignore this issue. Write your MP and let them know that selling off Canadian companies and putting them out of reach of Canadian investors is absolutely unacceptable.

8 thoughts on “Leave Nexen Alone?”

  1. As a Chinese, i don’t like this, either. Since i believe the price is too high, and the government sets tough conditions, like more than half of the top executives are Canadians. As i know, oil sands is too heavy to transport back to China, so if CNOC bought Nexen just for making money, i don’t think 15.1B USD+ 4.3B USD debt is a good deal. It just my personal idea, and i think Canadian Government should do something in the future, because the most oil companies in the world are national controlled, they are easier to give a good price to purchase other oil companies like Nexen. There will no Canadian oil company any more if the situation goes on.

  2. Dear Dr.Gingras,

    Here are some thoughts about your Article: Leave Nexen Alone?

    Christian Paradis(Minister of Industry)announced that has approved the proposed acquisition of Nexen by CNOOC Limited (CNOOC),and no further approvals are required in Canada on December 7th 2012.

    As a Canadian citzen, it would be sad by watching Canadian Companies has been acquired by the companies from oversea.I am Chinese, and I would be sad definitely as well if any foreign companies acquired Chinese compaies.

    However, sometimes the government seems don’t really care about our feelings (national spirit?patriotism? maybe) but their benefits.In my opinion, I think there are two main benifits of this acquisition drives Canadian governmentto approval:

    1. Canadian Government could gain the profits from acquisition directly.
    The market value of Nexen was about 9.38 billion dollars, however CNOOC paid 15.1 billion dollars for acquiring, and moreover, CNOOC has to pay 4.3 billion extra debets for Nexen in the future.

    2. So far, Canaian Crude oil export has been mostly confined to the market the United States.The price of Crude oil is way below to the international price of Crude. It led to lose profits about 60 million dollars everyday in the past years. What was worse,IEA and EIA believe that the U.S might be the biggest oil producing country in the world in the future (overtake Saudi Arabia) since the United States shale oil and gas exploitation made breakthrough progress recently, then the U.S might no looger denpendent on Canadian oil export. Thus,the Canadian crude oil export market should be diversified, open to other country. China as the biggest oil consumption country after the U.S, is a great potential market for Canadian oil companies. Once Canada get rids of the U.S on crude oil export,it will bring more profits if Canadian expanded export market.

    Overall, under the economic benefits and in order to improve diplomatic ties, Canadian finally approved this purchase.

    (I am apologize if you might think any part of my article is rude. I don’t mean that but due to my bad language skills.)

    Sincerely,

    Zekai Jia

    1. Canadians cannot invest in CNOC. Canadians can invest in many other companies. In other words, we cannot share in CNOC success.

  3. Great blog post!

    As an employee of Nexen I want to take this opportunity to shed some light on the recent acquisition. One of Investment Canada’s requirments for the purchase of Nexen by CNOOC was that CNOOC list on the TSX. Apparently this is being worked on as we speak, so keep an eye out on the Toronto Stock Exchange as CNOOC stocks will be available for purchase by Canadian’s in the near future. You’re going to need large pockets, however, as CNOOC stock currently sells on the NYSE for approximately $187.00 a share!

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